2018 Connecticut Tax Updates

The 2018 Session generated significant Connecticut tax legislation, largely in reaction to the federal Tax Cuts and Jobs Act of 2017. Like many jurisdictions with a state income tax, Connecticut sought to counteract the new federal income tax limitation on the ability of individuals to take an itemized deduction for certain state and local taxes. The general Assembly enacted a new tax on pass-through businesses, such as Subchapter S corporations and limited liability companies, and other entities taxed as partnerships for federal income tax purposes. The efficacy of these attempts at federal tax relief may be limited based upon current and future federal and state guidance. In addition, Connecticut, together with other states, instituted a lawsuit challenging the new federal limitation on the deduction of state and local taxes.